The value of passive income has been recognized for years, but its importance was brought into sharp focus when a friend in his 50s confided in me. He admitted that neglecting to learn personal finance and build passive income streams is now holding him back from pursuing his entrepreneurial dreams. Despite decades of experience, he’s stuck. Why? He’s “paycheck dependent” and can’t afford to take risks.
Passive income isn’t just about money; it’s about time—the most valuable resource you have. Time, not money, is the real luxury. Ideally, one should start learning personal finance in their early teens. Data shows that the wealthy are more likely to invest in stocks, a key source of passive income. In 2020, 53% of the ultra-rich—the top 1% by wealth in the U.S.—owned stocks, compared to only 0.6% of those in the bottom 50%. Additionally, between 2006 and 2021, stock market indices in major economies such as the U.S., India, Brazil, China, and Japan appreciated by approximately 225%, 700%, 330%, 200%, and 160%, respectively. If we consider 2022 and 2023, the appreciation would be even greater.
The earlier you start investing and building passive income, the more control you’ll have over your time and your future. As I reflected on my friend’s situation, I realized: “The best time to learn personal finance was 35 years ago. The second best time is now.”